Crypto exchange FTX is investigating a $473 million hack
Soon after crypto exchange FTX filed for chapter 11 bankruptcy, news broke of a possible hack that did over $400 million in damages. Read below for more.
The funds were reportedly stolen after the company files for bankruptcy last week.
After filing for bankruptcy last week, Crypto exchange FTX is now investigating a possible hack. The event, which took place shortly after the company went under, wiped over $400 million dollars in digital assets. While the investigation takes place, the company moved all of its assets offline.
Ryne Miller, which works as general counsel at crypto exchange FTX, tweeted Saturday morning that the company is taking precautionary steps. They’ve moved all of its digital assets to a cold wallet. That means the wallet is not currently with access to the internet. The news broke just as FTX filed for Chapter 11 bankruptcy last Friday.
Crypto risk management firm Elliptic says that while the theft hasn’t been confirmed yet, approximately $473 million in digital assets were allegedly stolen from crypto exchange company FTX. Miller said the process was expedited on Friday in order to reduce damage after the company observed a series of unauthorized transactions.
Then, in another tweet later that evening, Miller stated that crypto exchange company FTX is currently investigating irregularities regarding wallet movements. These movements are directly related to FTX balances across different exchanges. He said that the facts are still unclear, but the exchange should share more information whenever they have it.
According to Elliptic, stablecoins and other missing digital assets are converting to ether on decentralized exchanges. Ether is the second most popular digital token after Bitcoin. The risk management firm said that is a common approach hackers use to avoid the seizing of their funds.
Crypto exchanges are now under a microscope after FTX
Until last week, crypto exchange firm FTX was one of the most powerful companies in the crypto segment. Then, it began collapsing. Founder and CEO Sam Bankman-Fried resigned and reportedly lost his $16 billion fortune in a matter of days.
According to its bankruptcy filing, crypto exchange company FTX said it has liabilities and assets estimated between $10 and $50 billion. Last Friday, Bankman-Fried resorted to a thread on Twitter to apologize to investors and enthusiasts. He finished the thread saying he hopes things will eventually recover.
Surveillance of crypto exchanges are on the rise. One of the most popular crypto firms, crypto.com, admitted to sending over $400 million in ETH to the wrong account by mistake. Kris Marszalek, the company’s CEO, said on Twitter that three weeks ago, a transfer of 320,000 Ethereum tokens was made to a corporate account of a competing firm instead of a cold wallet.
The company recovered the funds. But the situation caused users to withdraw from the platform in fear of it having the same fate as crypto exchange FTX. Changpeng Zhao, the CEO of Binance, said on Twitter that whenever an exchange has to move large amounts of digital assets, it’s a clear sign of trouble.
Marszalek then took to Twitter again on Sunday. He said the company has since strengthened their process to manage any and all internal transfers more effectively.
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Which one is best to invest in, crypto or regular investments?
With all the news surrounding crypto exchange FTX and other crypto firms, investors are getting wary. But there’s still good return in crypto investments if you know where to look. However, are they better than traditional investments? Check the link below to find out.
About the author / Aline Barbosa
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